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Economic Test - 1 
Website​:​ Studydhaba.com 
Author:​ Ajit Om Ghyan  
  

Here is the List of All Questions for Competitive 

Exams 

Hello Friends Here We are providing you Economics based Questions Paper For 
Upcoming competitive Exams . Try To Solve All These Questions .  

● This test booklet contains 50 questions.  

● All items carry equal marks (2 marks). -0.666 will be deducted for each wrong 
answer (negative marking). 
● Question Paper Is of 100 Marks .  
● All questions Are Based on Indian Economics - Micro And Macro Economics . 

 
1.When the productive capacity of the economic system of a State is inadequate to 
create sufficient number of jobs, it is called 
a. Seasonal unemployment 
b. Structural unemployment 
c. Disguised unemployment 
d. Cyclical unemployment 

2. Fiscal policy in India is formulated by 

A. The Reserve Bank of India 

B. The Planning Commission 
C. The Finance Ministry 
D. The Securities and Exchange board of India 

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3. Which one among the following is not a clause of World Trade Organization? 

1. Most favoured nation treatment 

2. Lowering trade barriers with negotiations 
3. Providing financial support to the countries having deficit balance of payments 
4. Discouraging unfair trade practices such as anti-dumping and export subsidies 

4. Special Drawings Rights (SDRs) relate to 

a. The World Bank 
b. The Reserve Bank of India 
c. The World Trade Organization 
d. The International Monetary Fund 

5. Which of the following measures should be taken when an economy is going 

through inflationary pressures? 

1. The direct taxes should increased. 

2. The interest rate should be reduced. 
3. The public spending should be increased. 

Select the correct answer using the code given below: 

Code: 

a. 1 only 
b. 2 only 
c. 2 and 3 
d. 1 and 2 

6. National income ignores 

a. Sales of a firm 
b. Salary of employees 
c. Exports of the IT sector 
d. Sale of land 

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7. The TEAM-9 initiative is a techno economic cooperation venture between India 
and eight countries of 

a. West Africa 
b. East Africa 
c. North Africa 
d. Central Africa 

8. Which one among the following is not true for Special Economic Zones? 

a. No licence is required for import 

b. Manufacturing and service activities are allowed 
c. No permission for subcontracting 
d. No routine examination of cargo for export/import by customs authorities 

9. According to Goldman Sachs’ review of emerging economies, by 2050 which one of 
the following would be the order of the largest economies in the world? 

a. China-USA-India-Brazil-Mexico 
b. USA-China-India-Brazil-Mexico 
c. China-USA-Brazil-India-Mexico 

10. Who estimated the National Income for the first time in India? 

a. Mahalanobis 
b. Dadabhai Naoroji 
c. VKRV Rao 
d. Sardar Patel 
d. SA-Mexico-China-India-Brazil 

11. Economic development depends on 

a. Natural resources 
b. Capital formation 
c. Size of the market 
d. All of the above 

12. National income is generated from 

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a. any money making activity 
b. any laborious activity 
c. any profit-making activity 
d. any productive activity 

13. Money supply is governed by the 

a. Planning Commission 
b. Finance Commission 
c. Reserve Bank of India 
d. Commercial Banks 

14. The present Indian monetary system is based on 

a. Gold Reserve System 

b. Proportional Reserve System 
c. Convertible Currency System 
d. Minimum Reserve System 

15. A situation where we have people whose level of income is not sufficient to meet 
the minimum consumption expenditure is considered as 

a. Absolute Poverty 
b. Relative Poverty 
c. Urban Poverty 
d. Rural Poverty 

16. Full convertibility of a rupee means 

a. Purchase of foreign exchange for rupees freely 

b. Payment for imports in terms of rupees 
c. Repayment of loans in terms of rupees 
d. Determination of rate of exchange between rupee and foreign currencies freely 
by the market forces of demand and supply 

17. India is called a mixed economy because of the existence of 

1. Public Sector 
2. Private Sector 

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3. Joint Sector 
4. Cooperative Sector 
a. 1, 4 
b. 1, 2 
c. 3, 4 
d. 2, 4 

18. The term stagflation refers to a situation where 

a. Growth has no relation with the change in prices 

b. Rate of growth and prices both are decreasing 
c. Rate of growth is faster than the rate of price increase 
d. Rate of growth is slower than the rate of price increase 

19. Revealed Preference Theory was propounded by 

a. Adam Smith 
b. Marshall 
c. P. A. Samuelson 
d. J. S. Mill 

20. Gross Domestic Product is defined as the value of all 

a. Goods produced in an economy in a year 

b. Goods and services produced in an economy in a year 
c. Final goods produced in an economy in a year 
d. Final goods and services produced in an economy in a year 

21. An exceptional demand curve is one that moves 

a. Upward to the right 

b. Downward to the right 
c. Horizontally 

22. Production function explains the relationship between 

a. Initial inputs and ultimate output 

b. Inputs and ultimate consumption 
c. Output and consumption 

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d. Output and exports 
d. Vertically 

23. The Draft of the Five Year Plans in India is approved by the 

a. National Development Council 

b. Planning Commission 
c. National Productivity Council 
d. Ministry of Finance 

24. In Economics the terms ‘Utility’ and ‘Usefulness’ have 

a. Same meaning 
b. Different meaning 
c. Opposite meaning 
d. None of the above 

25. Nature of unemployment in agriculture in India is 

a. Only seasonal 
b. Only disguised 
c. Both (a) and (b) 
d. None of the above 

26. The terms "Micro Economics" and "Macro Economics" were coined by 

a. Alfred Marshall 
b. Ragner Nurkse 
c. Ragner Frisch 
d. J.M. Keynes 

27. During periods of inflations, tax rates should 

a. Increase 
b. Decrease 
c. Remain constant 
d. Fluctuate 

28. Which is the biggest tax paying sector in India? 

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a. Agricultural sector 
b. Industrial sector 
c. Transport sector 
d. Banking Sector 

29. ​Economics is what it ought to be​. This statement refers to 

a. Normative Economics 
b. Positive Economics 
c. Monetary Economics 
d. Fiscal Economics 

30. The excess of price a person is to pay rather than forego the consumption of the 
commodity is called 

a. Price 
b. Profit 
c. Producer Surplus 
d. Consumer Surplus 

31. A want becomes a demand only when it is backed by the 

a. Ability to purchase 
b. Necessity to buy 
c. Desire to buy 
d. Utility of the product 

32. The 'break-even' point is where 

a. marginal revenue equals marginal cost 

b. average revenue equals average cost 
c. total revenue equals total cost 
d. none of the above 

33. Rate of interest is determined by 

a. The rate of return on the capital invested 

b. Central Government 
c. Liquidity preference 

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d. Commercial Banks 

34. The purchase of shares and bonds of Indian companies by Foreign Institutional 
Investors is called? 

a. FDI 
b. Portfolio Investment 
c. NRI Investment 
d. Foreign Indirect Investment 

35. An individual’s actual standard of living can be assessed by 

a. Gross National Income 

b. Net National Income 
c. Per Capita Income 
d. Disposable Personal Income 

36. When there is an official change in the exchange rate of domestic currency, 
then it is called 

a. Appreciation 
b. Depreciation 
c. Revaluation 
d. Deflation 

37. Inflation redistributes income and wealth in favour of 

a. Pensioners 
b. Poor 
c. Middle class 
d. Rich 

38. The fringe benefit tax was introduced in the budget of 

a. 2003-04 
b. 2004-05 
c. 2005-06 
d. 2006-07 

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39. Excise Duty is a tax levied on : 

a. Commodities that are exported 

b. Commodities that are imported 
c. Both the exported and imported commodities 
d. Commodities that are produced and consumed within the country 

40. Who coined the term "Hindu rate of growth for Indian economy"? 

a. A.K. Sen 
b. Kirit S. Parikh 
c. Raj Krishna 
d. Montek Singh Ahluwalia 

41. Which one of the following is NOT an example of indirect tax? 

a. Sales tax 
b. Excise duty 
c. Customs duty 
d. Expenditure tax 

42. The major aim of devaluation is to - 

a. Encourage imports 
b. Encourage exports 
c. Encourage both exports and imports 
d. Discourage both exports and imports 

43. Interest on public debt is a part of - 

a. Transfer payments by the enterprises 

b. Transfer payments by the govt. 
c. National income 
d. Interest payments by house-holds 

44. Structural unemployment arises due to - 

a. Deflationary conditions 
b. Heavy industry bias 

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c. Shortage of raw materials 
d. Inadequate productive capacity 

45. Which of the following is not a necessary condition for the development of India? 

a. Capital accumulation 
b. Resource discovery 
c. Population growth 
d. Technological development 

46. Personal disposable income is - 

a. Always equal to personal income 

b. Always more than personal income 
c. Equal to personal income minus direct taxes paid by household 
d. Equal to personal income minus indirect taxes 

47. Which of the following most closely approximates our definition of oligopoly? 

a. The cigarette industry 

b. The barber shops 
c. The gasoline stations 
d. Wheat farmers 

48. Who said ‘Supply creates its own demand’? 

a. Adam Smith 
b. J. B. Say 
c. Marshall 
d. Ricardo 

49. The Indian economy can be most appropriately described as a -  

a. Capitalist economy 
b. Socialist economy 
c. Traditional economy 
d. Mixed economy 

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50. Indirect tax means - 

a. There is no direct relationship between the tax payer and the government 
b. Direct relationship between tax payer and the government 
c. Tax base is income 
d. The incidence and impact are on the same person on whom tax is imposed 

 
 
 
 
 
 
  
 
 
 
 
 
 

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